2010 (9) TMI 291 - ITAT, MUMBAI

Depreciation - goodwill and non-compete fees - acquisition of intellectual property rights/intangible assets in the form of distribution rights, technical support and trademarks - Application of Section 14A - Held that: - the claim of the assessee for depreciation on goodwill and non-compete fees has been allowed by applying the rule of consistency as well as relying on the concept of “block of assets”

Rule 8D of the Income Tax Rules 1962 is applicable only prospectively i.e. from A.Y. 2008-09. Since the assessment year involved in the present case is 2005-06 - disallowance made by the A.O. out of interest expenses u/s 14A and confirmed by the ld. CIT(A) is not sustainable in the light of [C.I.T. vs. Hero Cycles Ltd. (2009 -TMI - 35238 - PUNJAB AND HARYANA HIGH COURT)] decision - the quantum of disallowance u/s 14A for the years earlier to A.Y. 2008-09 has to be worked out by adopting some reasonable method -